Australia: Competition & Consumer Law News – 23 January 2018

Last Updated: 25 January 2018
Article by Howard Rapke, Ian Robertson and Paul Venus

Most Read Contributor in Australia, March 2019

In the media

Former Australian Bight Abalone CEO convicted over false and misleading information
Mr Andrew Ferguson, the former Chief Executive Officer of abalone farmer, Australian Bight Abalone (ABA), was found guilty on 17 counts related to providing false or misleading information to the ABA Board of Directors and prospective investors following a jury trial in the District Court of South Australia (19 January 2018). More...

Allianz, Suncorp to repay more than $60m over unnecessary car insurance
Insurance giants Allianz and Suncorp will refund a combined $65.2 million to more than 100,000 customers who were sold valueless add-on insurance through car dealerships (16 January 2018). More...

Makers of Nurofen ran 'misleading and deceptive' campaign against Panadol: court
Nurofen is better than paracetamol for common headaches, declared the advertisements in women's lifestyle magazines. The Federal Court has found that claim to be misleading and deceptive, after two pharmaceutical giants went head-to-head in a two-year legal battle (14 January 2018). More...

Thousands claim compensation for misleading Nurofen products
Thousands of compensation claims have been lodged over Nurofen products that were purported to tackle specific types of pain but which all contained the same active ingredient (11 January 2018). More...

39 per cent increase in consumer guarantee reports in 2017
More than 29,000 people reported consumer guarantee issues to the ACCC in 2017, with half noting problems getting remedies for faulty automotive, whitegoods or electronics products. Issues with faulty products and businesses being misleading about consumer rights are some of the most common reasons for people to contact the ACCC (08 January 2018). More...

ACCC's priorities for 2018: cartels
In an interview with the Australian Financial Review (AFR), ACCC Chairman Rod Sims has indicated that "2018 will be a very big turning point for cartel enforcement and cartel deterrence". In particular, Mr Sims indicated that there are likely to be three to four domestic-based criminal cartel actions in 2018, with the possibility of seeking jail sentences for individual executives. Mr Sims did not identify the companies involved or the sectors in which they operate, but commented that they varied in size (08 January 2018). More... [subscription access]

Decision published in ACCC's detergent cartel case
Justice Wigney handed down his decision on 22 December, finding that the ACCC had not discharged its burden of proving, on the balance of probabilities, that the respondent had entered into the claimed arrangement or understanding. The reasons for judgment have now been released and show that Justice Wigney preferred the economic evidence suggesting the conduct resulted from oligopoly behaviour rather than agreement. More...

Full Federal Court of Australia has upheld the Federal Court Valve case
The Full Federal Court of Australia has upheld the finding of a single judge of the Federal Court that US-based Valve Corporation engaged in misleading or deceptive conduct and made false or misleading representations about the availability of rights under the Australian Consumer Law in Valve's subscriber agreements and refund policies. The Court also dismissed the ACCC's allegation that Cussons had arrived at an understanding with the other laundry detergent manufacturers, which substantially lessened competition in the market for the supply of laundry detergent (22 December 2017). More...

ACCC warns about Digital Sourcing, formerly Luxstyle
The ACCC has issued a Public Warning Notice about the conduct of overseas based online retailer Digital Sourcing ApS (Digital Sourcing), formerly Lux International Sales ApS (Luxstyle). The ACCC has issued this notice because it has reasonable grounds to suspect that the conduct of Digital Sourcing may breach the Australian Consumer Law by misleading consumers and asserting a right to payment for unsolicited goods, and considers that it is in the public interest to inform consumers about this conduct (20 December 2017). More...

Belkin undertakes to honour lifetime warranties
The ACCC has accepted a court-enforceable undertaking from consumer electronics manufacturer Belkin to honour claims under its lifetime warranty policies for the lifetime of the original purchaser. Belkin has acknowledged that its lifetime warranty representations may have breached the Australian Consumer Law, which prohibits misleading or deceptive conduct and false or misleading representations about the effect of a warranty or guarantee (19 December 2017). More...

WA building company amends unfair contracts
Perth based building company, 101 Residential Pty Ltd, has amended its standard home building contract following ACCC concerns that it contained unfair terms and made false or misleading representations. Between October 2014 and August 2017, 101 Residential's building contract contained non-disparagement clauses that allowed it to prohibit customers from publishing any unapproved information about the company, including online reviews (15 December 2017). More...

Optus in court for allegedly misleading 20,000 customers about moving to the NBN
The ACCC has instituted proceedings in the Federal Court against Optus Internet Pty Ltd (Optus), alleging it misled customers about the need to move quickly from its existing HFC network to the National Broadband Network (NBN). The ACCC alleges that between October 2015 and March 2017, Optus made false and misleading representations by writing to its customers to advise it would disconnect their HFC service within a specified time period as the NBN was coming to their area (15 December 2017). More...

Fletcher & Parker (Balwyn) Pty Ltd - Court outcome
A real estate agency in Melbourne's east will pay $880,000 after the Federal Court of Australia found it engaged in misleading or deceptive conduct and making false or misleading representations about property sales (14 December 2017). More...

ACCC releases second interim report as part of Gas Inquiry
The ACCC has released its 'second interim report as part of its inquiry in Australia's wholesale gas supply arrangements. When releasing the report, ACCC Chair, Rod Sims, observed that: Despite increased supply providing important short-term improvements in conditions, the market is still not operating as well as it could. Prices remain higher than they would be in a well-functioning and competitive market'. More... More...

In practice and courts, published reports

Small business collective bargaining guidelines consultation
The Australian Competition and Consumer Commission is seeking feedback on new guidelines for small business collective bargaining. The guidelines are for small businesses, including farmers, to assist their understanding of the authorisation and notification processes for obtaining ACCC approval for collective bargaining and boycotts. Submissions close on 23 February 2018. More...


GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Limited (No 2) [2018] FCA 1

CONSUMER LAW – whether the manufacturer of Nurofen engaged in conduct which was misleading or deceptive or likely to mislead or deceive or made false representations by conducting a comparative advertising campaign in which it claimed that Nurofen provided faster and more effective relief from the pain caused by common headaches than does Panadol in circumstances where:

  1. Only one clinical trial suggested that it did provide faster and more effective pain relief for common headaches than does Panadol;
  2. Two other studies conducted subsequently did not replicate the results of the one positive clinical trial; and
  3. The authors of three meta-analyses concluded that no authoritative comparison was possible in the present state of scientific knowledge.

Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 4) [2017] FCA 1590
TRADE PRACTICES – competition law – restrictive trade practices – cartel conduct – whether Respondent contravened ss 44ZZRK or 45(2) of the Trade Practices Act 1974 (Cth) – where Respondent and two other manufacturers and wholesale suppliers of laundry detergent in Australia transitioned to ultra concentrated laundry detergent and ceased supplying retailers with standard concentrates at about the same time – whether Respondent entered into an arrangement, or arrived at an understanding, with the other suppliers, in relation to the transition that included exclusionary provisions, or provisions that had the purpose, or had or were likely to have, the effect of substantially lessening competition in the market for laundry detergent in Australia – parallel conduct – exclusionary provisions – Jones v Dunkel inferences.
Held: applicant did not discharge its burden of proving on the balance of probabilities that the respondent entered into any such arrangement or arrived at any such understanding.

Director of Consumer Affairs Victoria v Domain Register Pty Ltd [2017] FCA 1603
CONSUMER LAW – misleading or deceptive conduct – knowledge to be imputed to target audience –respondent sent unsolicited notices to businesses offering to register a ".com" domain name equivalent to their existing "" domain name – notices similar in appearance to an invoice– whether conduct in sending notices constitutes misleading or deceptive conduct in breach of s 18 of the Australian Consumer Law (ACL) – conduct likely to mislead or deceive – whether "unsolicited services" in s 40(3) of the ACL includes services to be provided in the future – no breach of s 40(3) of ACL. Competition and Consumer Act 2010 (Cth); Corporations Act 2001 (Cth); Trade Practices Act 1974 (Cth); Competition and Consumer Regulations 2010 (Cth); Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010; Australian Consumer Law and Fair Trading Act 2012 (Vic).

Mastec Australia Pty Ltd v Trident Plastics (SA) Pty Ltd (No 2) [2017] FCA 1581
CONTRACTS - First Applicant contracted with a company to design and manufacture tools for the production of components of mobile garbage bins – First Respondent, which was related to the company, later manufactured and sold mobile garbage bins making use of the designs for the First Applicant's product – determination of content of contract – whether there was an implied term as to the beneficial ownership of computer aided design drawings – whether there was an implied term as to the confidentiality of the drawings.
EQUITY – duty of confidence – whether duty exists.
CONSUMER LAW – misleading or deceptive conduct – alleged contraventions of ss 18(1) and 29(1)(g) and (h) of the Australian Consumer Law (ACL) – whether First Respondent's promotional material contravened the ACL – whether First Respondent engaged in misleading or deceptive conduct by passing off – accessorial liability of Second Respondent for alleged contraventions.
Australian Consumer Law ss 2(1), 18, 29; Competition and Consumer Act 2010 (Cth) Sch 2; Copyright Act 1968 (Cth) s 35(6); Trade Practices Act 1974 (Cth) ss 52, 53.

Berry v CCL Secure Pty Ltd [2017] FCA 1546
TRADE PRACTICES – deceit – misleading or deceptive conduct – agency agreement between applicants and respondent for supply of polymer product for printing banknotes to Government of Nigeria – where agency agreement gave applicants right to commission for invoice sales of polymer – whether applicants signed letter terminating agency on basis of representations by respondent that, first, a new agency agreement would be executed between the parties on existing terms and or secondly, if applicants signed a second document to develop in partnership a production facility in Nigeria it would be executed by respondent immediately – whether representations made by respondent – whether representations constituted misleading or deceptive conduct and or unconscionable conduct – whether, if applicants did not sign termination letter, respondent would have exercised powers under agreement to unilaterally terminate agency agreement without cause. Australian Consumer Law ss 5, 18, 20; Competition and Consumer Act 2010, (Cth) s 5, Sch 2.

Pokemon Company International, Inc. v Redbubble Ltd [2017] FCA 1541
INTELLECTUAL PROPERTY –infringement of an artistic work – requirement of original artistic work – presumption of ownership – authorisation of infringement - fair dealing – parody or satire – unauthorised reproduction – declaratory relief.
CONSUMER LAW – misleading and deceptive conduct –representation of sponsorship, approval or affiliation – effect of conduct on class of persons – application allowed.
Competition and Consumer Act 2010 (Cth); Copyright Act 1968 (Cth); Copyright Amendment Act 2006 (Cth); Copyright (International Protection) Regulations 1969 (Cth).

Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534
INDUSTRIAL LAW – alleged contraventions of s 340(1) Fair Work Act 2009 – whether there was a workplace right – whether complaint or inquiry about bonuses is a workplace right – whether complaint or inquiry about request to a third party is a workplace right - whether workplace right was exercised or proposed to be exercised – whether applicant was discriminated against - whether exercise of workplace right was a substantive or operative reason for dismissal – where decision maker gave no direct testimony in the proceedings – whether second respondent involved in the contravention.
INDUSTRIAL LAW – alleged contravention of ss 44(1) and 117 Fair Work Act 2009 – refusal to pay statutory entitlements – evidence that entitlements deliberately withheld – whether second respondent involved in contravention.
CONSUMER LAW – alleged contravention of s 31 Australian Consumer Law – whether misleading representations were made during offer of employment –whether alleged representations were reasonable.
CONTRACTS – contract of employment - whether term of good faith and reasonableness was implied in contract – whether contract breached by failing to pay bonuses and commissions – whether contract breached by failing to set budget targets – whether contract breached for failing to provide additional incentive bonus.
CONTRACTS – cross claim – whether payment to applicant was a loan or advance– whether payment was a discretionary bonus.
COMPENSATION – claim for loss of opportunity to work for first respondent – whether employment would have continued - claim for loss of opportunity to work at former employer – claim of non-economic loss for hurt and humiliation - whether post dismissal actions of employer are relevant to compensation.
Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law ss 4, 31, 224, 236.

Director of Consumer Affairs Victoria v Fletcher & Parker (Balwyn) Pty Ltd [2017] FCA 1521

CONSUMER LAW – admitted contraventions of Australian Consumer Law – misleading or deceptive conduct and false or misleading representations – real estate agents underquoting sale price estimates to potential property buyers – whether the proposed orders are appropriate in the circumstances – pecuniary penalty – declaratory relief – adverse publicity order – compliance program – costs.
Competition and Consumer Act 2010 (Cth); Australian Consumer Law and Fair Trading Act 2012 (Vic); Estate Agents Act 1980 (Vic).

Skinner v Redmond Family Holdings Pty Ltd [2017] NSWCA 329
TRADE PRACTICES – misleading and deceptive conduct – whether failure to disclose creditors' unilateral right to convert debts to equity was misleading and deceptive – whether reasonable expectation on the part of the respondent as prospective investor that convertibility of loans to equity would be disclosed – where failure to disclose occurred before respondent acquired its shareholding in companies – where purported conversion of loans to equity diluted respondent's shareholding significantly.
TRADE PRACTICES – misleading and deceptive conduct – whether non-disclosure of convertibility of loans to equity was causative of respondent's decision to acquire shares in companies.
TRADE PRACTICES – misleading and deceptive conduct – whether primary judge erred in apportioning responsibility for misleading and deceptive conduct equally between appellants.
APPEAL AND NEW TRIAL – application to adduce further evidence – whether substantial injustice to the appellants if unable to rely on further evidence – where evidence was available by reasonable diligence to be adduced at trial – where high degree of probability of a different result at trial.

Royce v Youi Pty Ltd [2018] QCAT 005
INSURANCE – MOTOR VEHICLES – INSURANCE OF MOTOR VEHICLES FOR LOSS OR DAMAGE – where contractual discretion to declare vehicle total loss – where vehicle so declared – where insured indemnified according to insurance policy – where vehicle written off – where vehicle listed on written-off vehicle register – where vehicle not re-registrable for public road use – where vehicle salvage sold at public auction – where insured informed of registration preclusion before auction – where insured bought vehicle salvage at auction – where insured believed removal of vehicle from register achievable for error – where insurer denied error – where vehicle not removed from register – whether vehicle wrongly declared total loss and written off – whether insurer breached insurance policy and duty of utmost good faith to insured.
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – where insured a consumer – where consumer claim both liquidated and un-liquidated – where Australian Consumer Law applies – where contract of insurance excluded from consumer guarantee provisions of Australian Consumer Law – where no consumer guarantee remedy – where indemnity within definition of a service under Australian Consumer Law – where contract of insurance not excluded from misleading and deceptive conduct and/or unconscionable dealing provisions of Australian Consumer Law.
TRADE PRACTICES – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – UNCONSCIONABLE CONDUCT – where misleading and deceptive conduct not alleged by insured – where insured alleged insurance policy voidable or void for unconscionable conduct – whether insurer acted unconscionably.
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – whether claim for unliquidated damages for breach of common law implied term of due care and skill in provision of services within jurisdiction of the Queensland Civil and Administrative Tribunal.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Ian Robertson
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